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urgent help with negotiations re private house sale(18 Posts)
Our neighbour is a business which needs additional licenses to further it's activities - that are less likely to be approved with no residential neighbours and that we would have to object to in any application as it would impact our property and lives.
We are in negative equity so were considering renting our property out and renth elsewhere as we want to try for dc2 and would need 3 bedrooms as opposed to our current 2. But aware that being a landlord would come with risks as well as continued maintenance of an old cottage which possibly has damp and we fear is moving (previous subsidence in the 70's due to local mining and a conservatory which will need replacing in a few years.
The neighbour approached us last week asking how much we need to move - we gave a price £2k over our mortgage balance to pay solicitor's fee and rental deposit. They are yet to confirm that they accept. The amount I believe to be £20k over market value - we have been v open about the fact that we are making a loss (from purchase price plus improvements we have made ) but this will clear the mortgage.
We can't move the mortgage as they need a 10% deposit even though we have have an existing mortgage.
My parents are aghast as they feel we should have asked for more money to allow us to buy elsewhere as they feel it is wrong to come of the housing ladder
Anyway - they feel we should have a solicitor doing the negotiation but we feel it is too late as we have named our price (which we were happy as it has been awful since this new neighbour came and would possibly be worse going on) and whilst we realise that they will make a fortune with the new venture going ahead with no obstructions e.g. us that the horse for asking for more has bolted?
Sorry more likely to be approved with no neighbours.
If you have already signed the contract it's one thing if not you are not yet obliged to sell to them at this price or at all I believe.
A solicitor could help you understand your options at this stage.
You will need to appoint solicitors to manage the sale admin, but it would be very unusual for solicitors to negotiate price for you, so I don't think you messed up in that respect but you have certainly put yourself in a poor position negotiation wise...why start so low? You are not obliged to stick to that, you could try going back saying you have thought about it more and need a higher price, but you have rather shown your hand and they will probably drive you back down now and it could drag on between you...
I am assuming you haven't signed anything too...
Also, it sounds like you would struggle to sell the property at all with damp/subsidence issues, let alone at £20k over market value. On balance you may be getting out very lightly and if you had been overly greedy in potential buyer's eyes, they could just walk away. What kind of business is it? You have to look at it as they are too, how long will it take them to make back the cost of expansion once they have your house and do whatever else they need to do?
Why don't you get a local agent to do a free no obligation valuation? Or indeed several - that is what I would do in your position. From that you can work out whether it is a good deal or not.
Until you have signed contract you can change your mind. You say in the OP that they haven't accepted!
If you want to go back into bat, you will have an uphill struggle, but point out that what was more or less an off the cuff agreement is now backed up with professional valuations. The figure you need to clear mortgage is irrelevant in how a property is valued.
Absolutely you will need a solicitor, but he/she won't be involved in negotiations...but may be able to point out other pitfalls.
I definitely agree we have shown our hand - I think we were just so happy to have the offer and wanted to be as fair as possible ( we would be rubbish in business haha) I personally think they wouldn't have gone much higher and we didn't want to seem greedy - we feel like we've done well not to make more of a loss.
My parents are panicking and it has made me doubt our decision. I didn't want to spend on a silicitor unless they accept and agree to go ahead.
They would make the money back easy - even the extra 10-14k we would need to buy again but I do think it's too late and wish my parents would drop it - even though it's only coming from a good place.
Forget about estate agent valuations, market value etc. You are not selling on the open market so it's market price is irrelevant. What you need to consider IF you sell to your neighbours is the value to THEM. Which as it will enable them to gain planning permission to significantly expand their business and presumably their profits, will be a lot higher than market value.
I'd approach a local solicitor to do the conveyancing for you, and write to your neighbour giving the solicitor's details but saying they will be acting as conveyancers only and you will negotiate the price directly, and that you have reconsidered your position and are no longer able to accept an offer at the previous price, then ask for a lot more - say a further £30k so you have a deposit (you don't have to give them any reason, but if you wanted you could always say you now realise your lender won't allow you to port the mortgage unles you have a 10% deposit which amounts to £30k).
Ps for the neighbours it is a case of finding cash as they don't want to use the bank so they are amicable to the amount it's just a case of logistics.
Oooh titchy - you sound like a negotiator!
Would they be put off altogether is our worry?
Titchy's suggestion sounds like a good one. No harm in trying. From the neighbour's point of view, as I understand it, they need your house to be non-residential one way or another. If you've been willing to move so far and now say to them that you have uncovered a problem with your plans they may be sympathetic - even if you end up meeting in the middle on price. Remember, the worst case scenario from their point of view is you stay in the house, object to the plans and start a load of legal wrangling, which I'm sure they don't want.
I agree your parents are not being helpful by panicking though. I think worries about "coming off the housing ladder" might be legitimate if (a) the market was shooting upwards and (b) your situation was typical and you could achieve an open market price for your house that would enable you to stay on the ladder. Since (a) definitely isn't true and (b) may not be true(?), it's a bit irrelevant.
I think that if you're in negative equity and want to move away, then having someone clear your mortgage and avoid the hassle of putting your house on the market is a great deal. Especially if that is £20k over market value. Asking for more now will run the risk of your neighbours withdrawing their offer. Then where would you be?
You wouldn't need a solicitor to negotiate for you. You need to instruct a surveyor for that.
You don't need a solicitor to negotiate for you, but with Titchy's approach you are absolutely banking on the fact that they will NOT get the licences if you object. Are you absolutely convinced of that? without wishing to point out the blinking obvious, a licensing committee decision could leave you with negative equity, a problem house iwth subsidence issues and unpleasant activity next door.
Your neighbours DO have an alternative, whcih is for them to move. they do NOT need your house at any cost. Would a difference in price make it just simpler for them to move and leave you with neg equity in a property that's next to a commercial unit that is changing to something else unknown?
It's not open market but £20k over value with a problem properly is a f*cking great deal adn you shoudl instruct a solicitor to bite their hands off, fast.
To put it another way, maybe your parents don't fully understand that with the negative equity you would be coming off the housing ladder if you sold at this point no matter who you sold it to. And one way or another you ARE going to sell, because of the neighbour issue. So if by any chance the neighbour is prepared to pay you enough to keep you on it, that is a bonus, not a legitimate expectation.
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